#夏日创作营

In the past few days, Hong Kong stocks have performed okay.

So, as Hong Kong stocks rebound, is it a bounce or a full reversal?

First, the answer: I think, just like tech, it’s basically a rebound after a selloff from Wave A—not a reversal.

1. From the capital side

In Hong Kong stocks, the relative parties with pricing power—or that have a bigger impact on the price trend—are foreign investors.

Foreign investors account for roughly 60%–70% of Hong Kong stocks.

And among these foreign investors, there are two parts:

allocation capital and trading capital.

Of these, there is more capital that is geared toward longer-term allocation.

That means it’s not short-term gambling for a quick move, but that they genuinely think you’ve fallen too much.

Some US-dollar funds view Hong Kong as part of the Asian market. After it has dropped too far, they may add positions, and thus make allocations.

Another part is short-term trading capital.

It has some speculative attributes.

That is, they like the trend in the market over this period, and then money pours in.

Earlier, didn’t things go crazy in South Korea with Samsung and SK hynix? Those funds all headed to South Korea, and so the whole Hong Kong market dimmed.

According to statistics, as of the first week of July, foreign allocation-oriented funds have flowed in more, while trading-oriented funds not only haven’t flowed in, but have seen some outflows.

Overall, Hong Kong stocks have had too much downside, and people are coming to add positions—but we haven’t seen signals of a reversal yet.

So, from the capital side, it still leans toward a rebound, not a reversal.

2. From the sector side

So what about sectors?

In Hong Kong’s market, there are basically only a few kinds of sectors:

innovative drugs, Hang Seng Tech, new consumption, and state-owned/central-government SOE assets that lean more “value/dividend-like.”

Which sectors are rising now, and what’s the logic?

Innovative drugs are being bought because people are optimistic about its mid-term earnings.

Hang Seng Tech (AI applications) is mainly because everyone expects marginal growth to improve, but current earnings have not yet been validated.

3. From the liquidity side

At present, the Fed is still raising rates in words.

Not only that, the Hong Kong stock market will also face a wave of unlocks at the end of September this year.

Although to hedge the impact of the unlocks, related parties from several companies have voluntarily committed to extend lock-up periods or not cut their holdings within certain timeframes,

but the unlock wave itself will inevitably, to some extent, bring concerns about liquidity to the market.

On one side, US rate-hike expectations are shrinking liquidity.

On the other side, the unlock wave still needs to fan the flames.

Plus, global liquidity is currently on the tight side.

When liquidity tightens, it means there is less market capital.

Whether the bull market is over—we won’t go there. Stepping back, even if there really is a bull market, it would be a structural bull market.

After all, there’s only so much money. It’s easy to cover one area while neglecting another: you might save Hong Kong stocks, but still need to save the mainland A-shares.

So overall, because Hong Kong stocks fell quite deeply earlier, there is still room for a rebound here.

But whether it’s truly a reversal—Xiao Caishen thinks we need to be more cautious and wait and see.